Goldman Sachs' profits miss forecasts as trading struggled

Apr 19, 2017, 01:33
Goldman Sachs' profits miss forecasts as trading struggled

Goldman Sachs Group Inc. said its first-quarter earnings rose sharply over a year ago, but lower-than-expected trading revenue caused it to fall short of analyst estimates. Analysts polled by Thomson Reuters had expected Goldman Sachs to earn $5.31 a share on revenue of $8.45 billion.

Income from share dealing fell and fees from bond, currency and commodity trading were relatively flat. (GS) is -6.49 percent while its Performance (Week) is -2.33 percent and Performance (month) is at -9.51 percent.

Goldman's trading desks struggled in the first quarter, a sharp contrast to its competitors who all reported gains in trading last quarter and set investors' expectations that Goldman would perform just as well or better.

Tuesday's disappointment was enough to send Goldman shares tumbling 2.6 percent, to $220.35, in pre-market trading.

"The operating environment was mixed, with client activity challenged in certain market-making businesses and a more attractive backdrop for underwriting in our investment banking franchise", Chief Executive and Chairman Lloyd Blankfein said in a statement.

Trump on Gorsuch: 'I Got It Done in the First 100 Days'
Trump noted that Gorsuch and Kennedy are the first former clerk and justice to serve together on the nation's highest court. Scalia had anchored the court's conservative wing for almost three decades before he died unexpectedly in February 2016.

"We underperformed this quarter", he said on a conference call with analysts. Stock trading revenue was hit by declines in commissions and fees, reflecting lower volumes in the U.S. Bank of America said earlier Tuesday that its trading revenue climbed, while JPMorgan Chase and Citigroup last week reported revenue from that business exceeded estimates.

More than other large financial institutions, Goldman relies on trading to generate a profit. Treasury yields have since fallen to lows not seen in at least a month as concerns about economic growth and supportive fiscal policy have increased. "Goldman was down 46 percent, so you know there is no sugar coating", Kotowski said. Bank of America's Global Banking revenue rose 11% to a record of $5 billion, while Global Markets revenue rose 19% to $4.7 billion. Goldman's shares tumbled 4.2 percent to $216.80.

The business also recently announced a quarterly dividend, which was paid on Thursday, March 30th. Shares fell almost 5% by the time the market closed in a selloff that knocked roughly $4.3 billion off the market capitalization of America's most valuable bank. Fiera Capital Corp now owns 1,430 shares of the investment management company's stock worth $342,000 after buying an additional 5 shares during the period. Johnson Financial Group Inc. raised its position in shares of Goldman Sachs Group by 5.3% in the fourth quarter.

This is a breaking news story.